In Recapitalization, QVC Becomes Part Of Tracking Stock Liberty Interactive

The things we do for you home shopping geeks, like wade through boring financial statements.

Thursday QVC not only announced its fourth-quarter earnings, it did some fancy footwork with its stock, for any masochists who are interested. You wade through it.

Here’s the press release:

Liberty Interactive Corporation Announces Plan to Recapitalize into Two Tracking Stocks

ENGLEWOOD, Colo.–(BUSINESS WIRE)– Liberty Interactive Corporation (Nasdaq: LINTA, LINTB) (“Liberty”) today announced that its board of directors has approved the recapitalization of its common stock into shares of the corresponding series of two new tracking stocks, Liberty Interactive and Liberty Ventures.

“We are pleased to announce the Board’s approval to recapitalize Liberty into two tracking stocks,” said Greg Maffei, President and CEO of Liberty. “We expect this recapitalization to highlight each tracking stock’s operations and financial aspects of the attributed assets, provide greater investor choice, and raise capital while maintaining an optimal capital and tax efficient structure for Liberty.”

The Liberty Interactive tracking stock group initially will have attributed to it QVC, the eCommerce companies, a 34% stake in HSN, approximately $500 million of cash, $2 billion principal amount of QVC’s bonds, QVC’s $2 billion bank credit facility and approximately $1.1 billion principal amount of Liberty’s publicly traded senior notes and debentures. Cash to be attributed to Liberty Interactive and Liberty Ventures will come from various sources including cash on hand, cash from operations and proceeds from QVC’s bank credit facility with an expected balance at closing of $1.3-1.5 billion.

The Liberty Ventures tracking stock group initially will have attributed to it Liberty’s interests in Expedia, TripAdvisor, Time Warner, Time Warner Cable, AOL, Interval Leisure Group, Tree.com and Liberty’s green-energy investments, approximately $1.25 billion of cash, additional cash raised from the exercise of Liberty Ventures subscription rights, and approximately $3 billion principal amount of Liberty’s publicly traded exchangeable debentures.

In the recapitalization, Liberty stockholders will receive one share of the corresponding series of Liberty Interactive group tracking stock for each share of series A or series B Liberty common stock they own and one share of the corresponding series of Liberty Ventures group tracking stock for every 20 shares of series A or series B Liberty common stock they own. In addition, stockholders will also receive a subscription right to acquire one additional series A or series B share for every three shares of series A or three shares of series B Liberty Ventures tracking stock they receive in the recapitalization.

Here is how Maffei explained the move in a conference call today with analysts.

“With Liberty Interactive you’re going to be able to get a pure play video and eCommerce company better aligned with our retail eCommerce peers … With Liberty Venture we hope to better highlight some of the investments we have here that may have been overlooked due to their relative small size compared to QVC …”

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